S&P 500 clings to gain as others end mixed

Wall Street capped a wobbly day of trading Wednesday with a mixed finish for the major stock indexes, as technology and communication companies weighed on the market for a second straight day.

The S&P 500 rose 0.2 percent after shedding most of a 0.8 percent gain. The modest gain came a day after the benchmark index posted its worst drop since May. The index is on pace for its first monthly loss since January.

The Dow Jones Industrial Average also lost momentum as the day went on, but managed a 0.3 percent gain, while the techheavy Nasdaq composite gave back 0.2 percent after having been up 0.9 percent in the early going.

Bond yields stabilized after surging over the past week and weighing on the market, especially technology stocks. The higher yields have forced investors to reassess whether prices have run too high for stocks, because it makes them look expensive by comparison.

The broader market has lost ground in September, leaving the S&P 500 down 3.6 percent for the month with one day left to go. Investors have spent much of the month reviewing a mixed batch of economic data that showed COVID-19 and the highly contagious delta variant’s impact on consumer spending and the employment market recovery.

Wall Street is still trying to gauge just how persistent rising inflation will be as the economy works through, and eventually recovers from, the pandemic. The Fed has said that higher inflation will likely be temporary and tied to the economic recovery, but more companies have signaled that they expect higher costs to linger. Bond yields began rising last week after the central bank signaled that it could begin taking action in coming months to curtail some of the support its been providing to the economy throughout the pandemic.

“Today is a sort of a tug-of-war between which is the bigger concern: is it inflation or is it rates?” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “Today’s action tells me we don’t know.”

The S&P 500 rose 6.83 points to 4,359.46. The Dow gained 90.73 points to 34,390.72, while the Nasdaq fell 34.24 points to 14,512.44. The Russell 2000 index of small companies also fell, shedding 4.47 points, or 0.2 percent, to 2,225.31.

Health care companies and a mix of companies that focus on consumer products accounted for a large share of the gains in the S&P 500. Eli Lilly rose 4 percent and Procter & Gamble added 1 percent.

Wall Street is also preparing for the next round of corporate earnings in the next few weeks. Investors will get a more detailed look at how supply chain problems and higher costs are impacting corporate finances.